This article first appeared on GuruFocus.

Sep 23 – Amazon (NASDAQ:AMZN) ticked higher in premarket trading Wednesday, rising 1.5%, after Wells Fargo shifted its stance on the stock to Overweight from Equal Weight. The firm pointed to growing confidence in Amazon Web Services (AWS) revenue momentum as the key driver behind the upgrade.

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Wells Fargo analyst Ken Gawrelski highlighted Project Rainier, a dedicated AWS data center being built in Indiana for Anthropic’s compute needs. The facility, expected to come online in January 2026, could deliver up to 2.2 gigawatts of capacity. At full scale, the project may generate around $14 billion in annual AWS revenue, according to the analysts.

The firm lifted its AWS revenue growth outlook, raising its 2026 forecast by 3% and its 2027 estimate by 7%. That translates into projected growth of 22% year-over-year in 2026, compared with Wall Street’s current expectation of 18%.

Still, Wells Fargo cautioned that the heavy upfront infrastructure costs tied to Project Rainier will likely pressure AWS margins by about 50 basis points in 2026. Even so, the firm believes long-term revenue expansion will outweigh near-term margin headwinds.

Based on the one year price targets offered by 68 analysts, the average target price for Amazon.com Inc is $263.47 with a high estimate of $306.00 and a low estimate of $206.00. The average target implies a upside of +19.38% from the current price of $220.71.

Based on GuruFocus estimates, the estimated GF Value for Amazon.com Inc in one year is $210.96, suggesting a downside of -4.42% from the current price of $220.71.